PROSPERITY BANCSHARES, INC.®

REPORTS SECOND QUARTER

2021 EARNINGS

•

Second quarter earnings per share (diluted) of $1.41

•

Second quarter net income of $130.6 million

•

Loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, increased $148.8 million or 0.9% (3.7% annualized) during the second quarter 2021

•

Deposits increased $347.1 million or 1.2% (4.8% annualized) during the second quarter 2021

•

Allowance for credit losses to total loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program loans, of 1.85%(1)

•

Nonperforming assets remain low at 0.11% of second quarter average interest-earning assets

•

Return (annualized) on second quarter average assets of 1.45%

•

Returns (annualized) on second quarter average common equity of 8.31% and average tangible common equity of 17.49%(1)

•

Second quarter efficiency ratio of 40.96%(1)

HOUSTON, July 28, 2021. Prosperity Bancshares, Inc.® (NYSE: PB), the parent company of Prosperity Bank® (collectively, 'Prosperity'), reported net income of $130.6 million for the quarter ended June 30, 2021 compared with $130.9 million for the same period in 2020. Net income per diluted common share was $1.41 for the quarter ended June 30, 2021, unchanged from the same period in 2020, and the annualized return on second quarter average assets was 1.45%. The second quarter of 2020 includes a tax benefit for net operating losses ('NOL') of $20.1 million, or $0.22(1) per diluted common share, as a result of the enactment of the Coronavirus Aid, Relief, and Economic Security Act ('CARES Act'). Additionally, loans, excluding Warehouse Purchase Program and SBA Paycheck Protection Program ('PPP') loans, increased $148.8 million or 0.9% (3.7% annualized) and deposits increased $347.1 million or 1.2% (4.8% annualized) during the second quarter of 2021. Nonperforming assets remain low at 0.11% of second quarter average interest-earning assets.

'For the second quarter of 2021, Prosperity had strong earnings, core loan growth, deposit growth, continued sound asset quality, impressive cost controls, a return on average tangible common equity of 17.49% and remains well reserved,' said David Zalman, Prosperity's Senior Chairman and Chief Executive Officer.

'Unemployment rates continue to decrease and GDP growth continues at a high level, as forecasted last year with the re-opening of the economy. We are seeing increased oil and gas prices as well as increased farm commodity prices, both of which are positive for the Texas and Oklahoma economies. Further, businesses and individuals continue to move to Texas for lower tax rates and a better quality of life,' continued Zalman.

______________

(1)

Refer to the 'Notes to Selected Financial Data' at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Page 1 of 17

'We believe that Prosperity is well positioned to grow along with the Texas and Oklahoma economies. For 2021, Prosperity Bank was ranked the 2nd Best Bank in America by Forbes and has been ranked in the Top 10 of Forbes America's Best Banks since 2010. We have a deep bench of associates with a passion to help Prosperity and our customers succeed,' concluded Zalman.

Results of Operations for the Three Months Ended June 30, 2021

Net income was $130.6 million(2) for the three months ended June 30, 2021 compared with $130.9 million(3) for the same period in 2020, a decrease of $290 thousand or 0.2%. Net income per diluted common share was $1.41 for the three months ended June 30, 2021 and 2020. Net income for the second quarter of 2020 includes a tax benefit for NOL of $20.1 million and merger related expenses of $7.5 million. Net income was $130.6 million(2) for the three months ended June 30, 2021 compared with $133.3 million(4) for the three months ended March 31, 2021, a decrease of $2.7 million or 2.0%. The change was primarily due to a decrease in PPP fee income and a decrease in loan discount accretion of $4.1 million, partially offset by an increase in securities income. Net income per diluted common share was $1.41 for the three months ended June 30, 2021 compared with $1.44 for the three months ended March 31, 2021, a decrease of 2.1%. Annualized returns on average assets, average common equity and average tangible common equity for the three months ended June 30, 2021 were 1.45%, 8.31% and 17.49%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and taxes) was 40.96%(1) for the three months ended June 30, 2021.

Net interest income before provision for credit losses for the three months ended June 30, 2021 was $245.4 million compared with $259.0 million for the same period in 2020, a decrease of $13.6 million or 5.2%. The decrease was primarily due to a decrease in the average loan balance and average rate on loans and a decrease in loan discount accretion of $12.1 million, partially offset by a decrease in the average rate on interest-bearing liabilities. On a linked quarter basis, net interest income before provision for credit losses was $245.4 million compared with $254.6 million for the three months ended March 31, 2021, a decrease of $9.2 million or 3.6%. The decrease was primarily due to a decrease in the average rate on loans and a decrease in loan discount accretion of $4.1 million, partially offset by a decrease in the average rate on interest-bearing liabilities and an increase in average investment securities balance.

The net interest margin on a tax equivalent basis was 3.11% for the three months ended June 30, 2021 compared with 3.69% for the same period in 2020. The change was primarily due to a decrease in the average loan balance and average rate on loans, an increase in lower yielding securities, a decrease in loan discount accretion of $12.1 million and higher cash balances due to excess liquidity, partially offset by a decrease in the average rate on interest-bearing liabilities. On a linked quarter basis, the net interest margin on a tax equivalent basis was 3.11% for the three months ended June 30, 2021 compared with 3.41% for the three months ended March 31, 2021. The change was primarily due to a lower average yield on loans, a $4.1 million decrease in loan discount accretion and higher net premium amortization on securities, partially offset by a decrease in the average rate on interest-bearing liabilities.

Noninterest income was $35.6 million for the three months ended June 30, 2021 compared with $25.7 million for the same period in 2020, an increase of $9.9 million or 38.5%. This increase was primarily due to an increase in credit card, debit card and ATM card income, an increase in mortgage income, lower loss on write-down of assets and an increase in other noninterest income. On a linked quarter basis, noninterest income increased $1.5 million or 4.6% to $35.6 million compared with $34.0 million for the three months ended March 31, 2021. This increase was primarily due to an increase in other noninterest income.

Noninterest expense was $115.2 million for the three months ended June 30, 2021 compared with $134.4 million for the same period in 2020, a decrease of $19.2 million or 14.3%, primarily due to decreases in merger related expenses, salaries and benefits and data processing as a result of efficiencies gained following the LegacyTexas Bank system conversion during the second quarter of 2020, partially offset by gains on sale of other real estate. On a linked quarter basis, noninterest expense decreased $3.9 million or 3.3% to $115.2 million compared with $119.1 million for the three months ended March 31, 2021. This decrease was primarily due to a decrease in salaries and benefits.

______________

(2)

Includes purchase accounting adjustments of $9.8 million, net of tax, primarily comprised of loan discount accretion of $12.2 million for the three months ended June 30, 2021.

(3)

Includes purchase accounting adjustments of $20.4 million, net of tax, primarily comprised of loan discount accretion of $24.3 million, and merger related expenses of $7.5 million for the three months ended June 30, 2020.

(4)

Includes purchase accounting adjustments of $13.2 million, net of tax, primarily comprised of loan discount accretion of $16.3 million for the three months ended March 31, 2021.

(5)

Includes purchase accounting adjustments of $23.0 million, net of tax, primarily comprised of loan discount accretion of $28.5 million for the six months ended June 30, 2021.

(6)

Includes purchase accounting adjustments of $44.6 million, net of tax, primarily comprised of loan discount accretion of $52.7 million, and merger related expenses of $8.0 million for the six months ended June 30, 2020.

Page 2 of 17

Results of Operations for the Six Months Ended June 30, 2021

Net income was $263.9 million(5) for the six months ended June 30, 2021 compared with $261.7 million(6) for the same period in 2020, an increase of $2.2 million or 0.8%. Net income per diluted common share was $2.84 for the six months ended June 30, 2021 compared with $2.80 for the same period in 2020, an increase of 1.4%. Annualized returns on average assets, average common equity and average tangible common equity for the six months ended June 30, 2021 were 1.49%, 8.46% and 17.95%(1), respectively. Prosperity's efficiency ratio (excluding net gains and losses on the sale or write down of assets and taxes) was 41.11%(1) for the six months ended June 30, 2021.

Net interest income before provision for credit losses for the six months ended June 30, 2021 was $500.0 million compared with $515.0 million for the prior year, a decrease of $15.0 million or 2.9%. The decrease was primarily due to a decrease in the average rate on interest-earning assets and a decrease in loan discount accretion of $24.2 million, partially offset by a decrease in the average rate on interest-bearing liabilities.

The net interest margin on a tax equivalent basis for the six months ended June 30, 2021 was 3.26% compared with 3.75% for the same period in 2020. The change was primarily due to an increase in lower yielding loans, a decrease in loan discount accretion of $24.2 million, higher net premium amortization on securities and higher cash balances due to excess liquidity, partially offset by a decrease in the average rate on interest-bearing liabilities.

Noninterest income was $69.6 million for the six months ended June 30, 2021 compared with $60.1 million for the same period in 2020, an increase of $9.5 million or15.8%. This increase was primarily due to an increase in credit card, debit card and ATM card income, an increase in mortgage income, lower net loss on write-downs of assets and an increase in other noninterest income, partially offset by a decrease in nonsufficient funds ('NSF') fees.

Noninterest expense was $234.3 million for the six months ended June 30, 2021 compared with $259.1 million for the same period in 2020, a decrease of $24.8 million or 9.6%. The change was primarily due to decreases in merger related expenses, data processing, net occupancy and equipment and other noninterest expense as a result of efficiencies gained following the LegacyTexas Bank system conversion during the second quarter of 2020, partially offset by a gain on sale of other real estate.

Balance Sheet Information

At June 30, 2021, Prosperity had $36.100 billion in total assets, an increase of $3.133 billion or 9.5% compared with $32.967 billion at June 30, 2020.

Loans at June 30, 2021 were $19.252 billion, a decrease of $1.773 billion or 8.4%, compared with $21.025 billion at June 30, 2020, primarily due to a decrease in commercial real estate, PPP and Warehouse Purchase Program loans. Linked quarter loans decreased $387.1 million or 2.0% from $19.639 billion at March 31, 2021, primarily due to a $359.1 million decrease in PPP loans. At June 30, 2021, the Company had $780.0 million of PPP loans compared to $1.392 billion of PPP loans at June 30, 2020 and $1.139 billion of PPP loans at March 31, 2021. Linked quarter loans, excluding Warehouse Purchase Program and PPP loans, increased $148.8 million or 0.9% (3.7% annualized) from $16.227 billion at March 31, 2021.

As part of its lending activities, Prosperity extends credit to oil and gas production and servicing companies. Oil and gas production loans are loans to companies directly involved in the exploration and/or production of oil and gas. Oil and gas servicing loans are loans to companies that provide services for oil and gas production and exploration. At June 30, 2021, oil and gas loans totaled $501.8 million (net of discount and excluding PPP loans totaling $92.3 million) or 2.6% of total loans, of which $283.1 million were production loans and $218.7 million were servicing loans, compared with total oil and gas loans of $639.4 million (net of discount and excluding PPP loans totaling $118.6 million) or 3.0% of total loans at June 30, 2020, of which $394.4 million were production loans and $245.0 million were servicing loans. In addition, as of June 30, 2021, Prosperity had total unfunded commitments to oil and gas companies of $298.4 million compared with total unfunded commitments to oil and gas companies of $276.9 million as of June 30, 2020. Unfunded commitments to producers include letters of credit issued in lieu of oil well plugging bonds.

Additionally, Prosperity extends credit to hotels and restaurants. At June 30, 2021, loans to hotels totaled $394.2 million (excluding PPP loans totaling $10.6 million) or 2.0% of total loans, an increase of $9.4 million or 2.4%, compared with $384.8 million (excluding PPP loans totaling $8.8 million) or 1.8% of total loans at June 30, 2020. At June 30, 2021, loans to restaurants totaled $201.9 million (excluding PPP loans totaling $92.1 million) or 1.0% of total loans, a decrease of $10.4 million or 4.9%, compared with $212.3 million (excluding PPP loans totaling $110.7 million) or 1.0% of total loans at June 30, 2020.

Deposits at June 30, 2021 were $29.110 billion, an increase of $2.958 billion or 11.3%, compared with $26.153 billion at June 30, 2020. Linked quarter deposits increased $347.1 million or 1.2% (4.8% annualized) from $28.763 billion at March 31, 2021.

Page 3 of 17

Asset Quality

Nonperforming assets totaled $33.7 million or 0.11% of quarterly average interest-earning assets at June 30, 2021, compared with $77.9 million or 0.28% of quarterly average interest-earning assets at June 30, 2020, and $44.2 million or 0.15% of quarterly average interest-earning assets at March 31, 2021.

The allowance for credit losses on loans was $302.9 million or 1.57% of total loans at June 30, 2021 compared to $307.2 million or 1.56% of total loans at March 31, 2021 and $324.2 million or 1.54% of total loans at June 30, 2020. The allowance for credit losses on loans to total loans, excluding Warehouse Purchase Program and PPP loans, was 1.85%(1) at June 30, 2021 compared with 1.89%(1) at March 31, 2021 and 1.90%(1) at June 30, 2020.

There was no provision for credit losses for the three months ended June 30, 2021 compared with $10.0 million for the three months ended June 30, 2020 and no provision for credit losses for the three months ended March 31, 2021. There was no provision for credit losses for the six months ended June 30, 2021 compared with $10.0 million for the six months ended June 30, 2020.

Net charge-offs were $4.3 million for the three months ended June 30, 2021 compared with net charge-offs of $13.0 million for the three months ended June 30, 2020 and net charge-offs of $8.9 million for the three months ended March 31, 2021. Net charge-offs for the second quarter of 2021 included $1.0 million related to resolved PCD loans. These PCD loans had specific reserves of $3.1 million, of which $1.0 million was allocated to the charge-offs and $2.1 million was moved to the general reserve. Further, an additional $1.4 million of specific reserves on resolved PCD loans without any related charge-offs was released to the general reserve.

Net charge-offs were $13.2 million for the six months ended June 30, 2021 compared with $13.8 million for the six months ended June 30, 2020. Net charge-offs for the six months ended June 30, 2021 included $8.2 million related to resolved PCD loans. These PCD loans had specific reserves of $9.8 million, of which $7.7 million was allocated to the charge-offs and $2.1 million was moved to the general reserve. Further, an additional $5.6 million of specific reserves on resolved PCD loans without any related charge-offs was released to the general reserve.

Dividend

Prosperity Bancshares declared a third quarter cash dividend of $0.49 per share to be paid on October 1, 2021 to all shareholders of record as of September 15, 2021.

COVID-19 Pandemic

Prosperity continues to monitor the latest developments regarding COVID-19. As of June 30, 2021, the states of Texas and Oklahoma have lifted their respective restrictions on all business and activities. The COVID-19 pandemic has resulted in significant economic uncertainties that have had, and could continue to have, an adverse impact on Prosperity's operating income, financial condition and cash flows. The extent to which the COVID-19 pandemic will impact Prosperity's operations and financial results during 2021 cannot be reasonably or reliably estimated at this time.

Since the implementation of the Paycheck Protection Program in 2020, Prosperity has obtained SBA approvals on approximately 18,700 loans totaling $2.036 billion and, as of June 30, 2021, had an outstanding balance of 7,770 loans totaling $780.0 million after remittance.

Also, in response to the COVID-19 pandemic, Prosperity has provided relief to its loan customers through loan extensions and deferrals. Prosperity's troubled debt restructurings do not include loan modifications related to COVID-19. Beginning in mid-March of 2020, Prosperity began offering deferral and modification of principal and/or interest payments to selected borrowers on a case-by-case basis. As of June 30, 2021, Prosperity had approximately $210.4 million in outstanding loans subject to deferral and modification agreements.

Conference Call

Prosperity's management team will host a conference call on Wednesday, July 28, 2021 at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) to discuss Prosperity's second quarter 2021 earnings. Individuals and investment professionals may participate in the call by dialing 877-883-0383 for domestic participants, or 412-902-6506 for international participants. The participant elite entry number is 4866823.

Alternatively, individuals may listen to the live webcast of the presentation by visiting Prosperity's website at www.prosperitybankusa.com. The webcast may be accessed from Prosperity's home page by selecting 'Presentations, Webcast & Calls' from the menu on the Investor Relations link and following the instructions.

Page 4 of 17

Non-GAAP Financial Measures

Prosperity's management uses certain non-GAAP financial measures to evaluate its performance. Specifically, Prosperity reviews diluted earnings per share excluding merger related expenses, net of tax, and net operating loss ('NOL') tax benefit; return on average assets excluding merger related expenses, net of tax, and NOL tax benefit; return on average common equity excluding merger related expenses, net of tax, and NOL tax benefit; return on average tangible common equity; return on average tangible common equity excluding merger related expenses, net of tax, and NOL tax benefit; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program and PPP loans; the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities and merger related expenses, for internal planning and forecasting purposes. Prosperity believes these non-GAAP financial measures provide information useful to investors in understanding Prosperity's financial results and their presentation, together with the accompanying reconciliations, provides a more complete understanding of factors and trends affecting Prosperity's business and allows investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. Further, Prosperity believes that these non-GAAP financial measures provide useful information by excluding certain items that may not be indicative of its core operating earnings and business outlook. These non-GAAP financial measures should not be considered a substitute for, nor of greater importance than, GAAP basis financial measures and results; Prosperity strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. Please refer to the 'Notes to Selected Financial Data' at the end of this Earnings Release for a reconciliation of these non-GAAP financial measures to the nearest respective GAAP financial measures.

Prosperity Bancshares, Inc. ®

As of June 30, 2021, Prosperity Bancshares, Inc.® is a $36.100 billion Houston, Texas based regional financial holding company providing personal banking services and investments to consumers and businesses throughout Texas and Oklahoma. Founded in 1983, Prosperity believes in a community banking philosophy, taking care of customers, businesses and communities in the areas it serves by providing financial solutions to simplify everyday financial needs. In addition to offering traditional deposit and loan products, Prosperity offers digital banking solutions, credit and debit cards, mortgage services, retail brokerage services, trust and wealth management, and treasury management.

As of June 30, 2021, Prosperity operated 274 full-service banking locations: 65 in the Houston area, including The Woodlands; 30 in the South Texas area including Corpus Christi and Victoria; 64 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area.

Cautionary Notes on Forward-Looking Statements

'Safe Harbor' Statement under the Private Securities Litigation Reform Act of 1995: This release contains, and the remarks by Prosperity's management on the conference call may contain, forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically, but not exclusively, identified by the use in the statements of words or phrases such as 'aim,' 'anticipate,' 'estimate,' 'expect,' 'goal,' 'guidance,' 'intend,' 'is anticipated,' 'is expected,' 'is intended,' 'objective,' 'plan,' 'projected,' 'projection,' 'will affect,' 'will be,' 'will continue,' 'will decrease,' 'will grow,' 'will impact,' 'will increase,' 'will incur,' 'will reduce,' 'will remain,' 'will result,' 'would be,' variations of such words or phrases (including where the word 'could,' 'may,' or 'would' is used rather than the word 'will' in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective. Forward-looking statements include all statements other than statements of historical fact, including forecasts or trends, and are based on current expectations, assumptions, estimates and projections about Prosperity Bancshares and its subsidiaries. These forward-looking statements may include information about Prosperity's possible or assumed future economic performance or future results of operations, including future revenues, income, expenses, provision for loan losses, provision for taxes, effective tax rate, earnings per share and cash flows and Prosperity's future capital expenditures and dividends, future financial condition and changes therein, including changes in Prosperity's loan portfolio and allowance for loan losses, future capital structure or changes therein, as well as the plans and objectives of management for Prosperity's future operations, future or proposed acquisitions, the future or expected effect of acquisitions on Prosperity's operations, results of operations, financial condition, and future economic performance, statements about the anticipated benefits of the proposed transaction, and statements about the assumptions underlying any such statement, as well as expectations regarding the effects of the COVID-19 pandemic on Prosperity's operating income, financial condition and cash flows. These forward‑looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Prosperity's control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Prosperity can: successfully identify acquisition targets and integrate the businesses of acquired companies and banks; continue to sustain its current internal growth rate or total growth rate; provide products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its sales objectives. Other risks include, but are not limited to: the possibility that credit quality could deteriorate; actions of competitors;

Page 5 of 17

changes in laws and regulations (including changes in governmental interpretations of regulations and changes in accounting standards); the possibility that the anticipated benefits of an acquisition transaction, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of two companies or as a result of the strength of the economy and competitive factors generally; a deterioration or downgrade in the credit quality and credit agency ratings of the securities in Prosperity's securities portfolio; customer and consumer demand, including customer and consumer response to marketing; effectiveness of spending, investments or programs; fluctuations in the cost and availability of supply chain resources; economic conditions, including currency rate, interest rate and commodity price fluctuations; the effect, impact, potential duration or other implications of the COVID-19 pandemic; and weather. These and various other factors are discussed in Prosperity Bancshares' Annual Report on Form 10-K for the year ended December 31, 2020 and other reports and statements Prosperity Bancshares has filed with the Securities and Exchange Commission ('SEC'). Copies of the SEC filings for Prosperity Bancshares may be downloaded from the Internet at no charge from http://www.prosperitybankusa.com.

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Bryan/College Station Area

Garland

Longview

Hitchcock

Avenue Q

Bryan

Grapevine

Mount Vernon

Liberty

North University

Bryan-29th Street

Grapevine Main

Palestine

Magnolia

Texas Tech Student Union

Bryan-East

Kiest

Rusk

Magnolia Parkway

Bryan-North

Lake Highlands

Seven Points

Mont Belvieu

Midland

Caldwell

McKinney

Teague

Nederland

Wadley

College Station

McKinney Eldorado

Tyler-Beckham

Needville

Wall Street

Crescent Point

McKinney Redbud

Tyler-South Broadway

Rosenberg

Hearne

North Carrolton

Tyler-University

Shadow Creek

Odessa

Huntsville

Oak Cliff

Winnsboro

Spring

Grandview

Madisonville

Park Cities

Tomball

Grant

Navasota

Plano

Houston Area

Waller

Kermit Highway

New Waverly

Plano-West

Houston

West Columbia

Parkway

Rock Prairie

Preston Forest

Aldine

Wharton

Southwest Parkway

Preston Parker

Alief

Winnie

Other West Texas Area

Tower Point

Preston Royal

Bellaire

Wirt

Locations

Wellborn Road

Red Oak

Beltway

Big Spring

Richardson

Clear Lake

South Texas Area -

Brownfield

Central Texas Area

Richardson-West

Copperfield

Corpus Christi

Brownwood

Austin

Rosewood Court

Cypress

Calallen

Cisco

Allandale

The Colony

Downtown

Carmel

Comanche

Cedar Park

Tollroad

Eastex

Northwest

Early

Congress

Trinity Mills

Fairfield

Saratoga

Floydada

Lakeway

Turtle Creek

First Colony

Timbergate

Gorman

Liberty Hill

West 15th Plano

Fry Road

Water Street

Levelland

Northland

West Allen

Gessner

Littlefield

Oak Hill

Westmoreland

Gladebrook

Victoria

Merkel

Research Blvd

Wylie

Grand Parkway

Victoria Main

Plainview

Westlake

Heights

Victoria-Navarro

San Angelo

Fort Worth

Highway 6 West

Victoria-North

Slaton

Other Central Texas Area

Haltom City

Little York

Victoria Salem

Snyder

Locations

Hulen

Medical Center

Bastrop

Keller

Memorial Drive

Other South Texas Area

Oklahoma

Canyon Lake

Museum Place

Northside

Locations

Central Oklahoma Area

Dime Box

Renaissance Square

Pasadena

Alice

Oklahoma City

Dripping Springs

Roanoke

Pecan Grove

Aransas Pass

23rd Street

Elgin

Stockyards

Pin Oak

Beeville

Expressway

Flatonia

River Oaks

Colony Creek

I-240

Georgetown

Other Dallas/Fort Worth Area

Sugar Land

Cuero

Memorial

Gruene

Locations

SW Medical Center

Edna

Kingsland

Arlington

Tanglewood

Goliad

Other Central Oklahoma Area

La Grange

Azle

The Plaza

Gonzales

Locations

Lexington

Ennis

Uptown

Hallettsville

Edmond

New Braunfels

Flower Mound

Waugh Drive

Kingsville

Norman

Pleasanton

Gainesville

Westheimer

Mathis

Round Rock

Glen Rose

West University

Padre Island

Tulsa Area

San Antonio

Granbury

Woodcreek

Palacios

Tulsa

Schulenburg

Grand Prairie

Port Lavaca

Garnett

Seguin

Jacksboro

Katy

Portland

Harvard

Smithville

Mesquite

Cinco Ranch

Rockport

Memorial

Thorndale

Muenster

Katy-Spring Green

Sinton

Sheridan

Weimar

Runaway Bay

Taft

S. Harvard

Sanger

The Woodlands

Yoakum

Utica Tower

Dallas/Fort Worth Area

Waxahachie

The Woodlands-College Park

Yorktown

Yale

Dallas

Weatherford

The Woodlands-I-45

14th Street Plano

The Woodlands-Research Forest

West Texas Area

Other Tulsa Area Locations

Abrams Centre

East Texas Area

Abilene

Owasso

Addison

Athens

Other Houston Area

Antilley Road

Allen

Blooming Grove

Locations

Barrow Street

Balch Springs

Canton

Angleton

Cypress Street

Camp Wisdom

Carthage

Bay City

Judge Ely

Carrollton

Corsicana

Beaumont

Mockingbird

Cedar Hill

Crockett

Cleveland

Coppell

Eustace

East Bernard

Lubbock

East Plano

Gilmer

El Campo

4th Street

Euless

Grapeland

Dayton

66th Street

Frisco

Gun Barrel City

Galveston

82nd Street

Frisco Warren

Jacksonville

Groves

86th Street

Frisco-West

Kerens

Hempstead

98th Street

- - -

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Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Balance Sheet Data (at period end)

Loans held for sale

$

9,080

$

20,991

$

46,777

$

51,694

$

39,516

Loans held for investment

17,147,146

17,345,506

17,357,788

18,013,333

18,428,474

Loans held for investment - Warehouse Purchase Program

2,095,559

2,272,389

2,842,379

2,730,614

2,557,183

Total loans

19,251,785

19,638,886

20,246,944

20,795,641

21,025,173

Investment securities(A)

11,918,691

10,088,002

8,542,820

7,431,495

7,717,586

Federal funds sold

281

8,986

553

56,469

568

Allowance for credit losses

(302,884

)

(307,210

)

(316,068

)

(323,635

)

(324,205

)

Cash and due from banks

1,059,879

1,947,235

1,342,996

1,031,193

332,873

Goodwill

3,231,636

3,231,636

3,231,636

3,231,692

3,231,964

Core deposit intangibles, net

67,417

70,304

73,235

76,478

79,748

Other real estate owned

144

462

10,593

11,548

6,160

Fixed assets, net

324,502

326,970

323,572

325,994

324,975

Other assets

548,473

553,147

602,994

560,724

571,807

Total assets

$

36,099,924

$

35,558,418

$

34,059,275

$

33,197,599

$

32,966,649

Noninterest-bearing deposits

$

10,099,149

$

9,820,445

$

9,151,233

$

8,998,328

$

9,040,257

Interest-bearing deposits

19,011,092

18,942,660

18,209,259

17,460,878

17,112,431

Total deposits

29,110,241

28,763,105

27,360,492

26,459,206

26,152,688

Other borrowings

-

-

-

2,570

103,131

Securities sold under repurchase agreements

433,069

377,106

389,583

380,274

365,335

Subordinated notes

-

-

-

125,146

125,365

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

29,947

29,947

Other liabilities

216,330

166,414

148,584

165,579

242,061

Total liabilities

29,789,587

29,336,572

27,928,606

27,162,722

27,018,527

Shareholders' equity(B)

6,310,337

6,221,846

6,130,669

6,034,877

5,948,122

Total liabilities and equity

$

36,099,924

$

35,558,418

$

34,059,275

$

33,197,599

$

32,966,649

(A) Includes $1,394, $970, $974, $(442) and $(1,767) in unrealized gains (losses) on available for sale securities for the quarterly periods ended June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively.

(B) Includes $1,101, $766, $770, $(349) and $(1,396) in after-tax unrealized gains (losses) on available for sale securities for the quarterly periods ended June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively.

Page 8 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(In thousands)

Three Months Ended

Year-to-Date

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Jun 30, 2021

Jun 30, 2020

Income Statement Data

Interest income:

Loans

$

216,803

$

233,075

$

241,625

$

244,255

$

242,772

$

449,878

$

490,015

Securities(C)

43,708

38,677

36,721

38,033

43,776

82,385

92,058

Federal funds sold and other earning assets

340

351

301

144

45

691

758

Total interest income

260,851

272,103

278,647

282,432

286,593

532,954

582,831

Interest expense:

Deposits

15,288

17,362

19,757

22,458

25,269

32,650

60,287

Other borrowings

-

-

33

52

533

-

3,465

Securities sold under repurchase agreements

164

159

224

309

337

323

1,094

Subordinated notes and trust preferred

-

-

999

1,500

1,499

-

2,999

Total interest expense

15,452

17,521

21,013

24,319

27,638

32,973

67,845

Net interest income

245,399

254,582

257,634

258,113

258,955

499,981

514,986

Provision for credit losses

-

-

-

10,000

10,000

-

10,000

Net interest income after provision for credit losses

245,399

254,582

257,634

248,113

248,955

499,981

504,986

Noninterest income:

Nonsufficient funds (NSF) fees

6,560

6,687

8,051

7,156

5,645

13,247

15,088

Credit card, debit card and ATM card income

8,918

8,031

8,193

8,315

7,263

16,949

14,737

Service charges on deposit accounts

6,062

5,978

6,046

5,920

5,790

12,040

11,894

Trust income

2,276

2,837

2,192

2,502

2,242

5,113

4,904

Mortgage income

2,914

3,307

3,989

2,958

1,820

6,221

3,830

Brokerage income

795

711

642

628

584

1,506

1,234

Bank owned life insurance income

1,294

1,292

1,252

1,449

1,508

2,586

3,053

Net (loss) on sale or write-down of assets

(244

)

(79

)

(675

)

(528

)

(3,945

)

(323

)

(4,330

)

Other noninterest income

6,981

5,244

6,857

6,524

4,768

12,225

9,653

Total noninterest income

35,556

34,008

36,547

34,924

25,675

69,564

60,063

Noninterest expense:

Salaries and benefits

75,611

80,037

77,809

75,068

79,109

155,648

156,391

Net occupancy and equipment

8,046

7,833

8,223

8,644

9,190

15,879

18,170

Credit and debit card, data processing and software amortization

8,718

8,233

8,442

8,776

11,690

16,951

23,111

Regulatory assessments and FDIC insurance

2,670

2,670

2,670

2,512

2,601

5,340

4,679

Core deposit intangibles amortization

2,887

2,931

3,243

3,270

3,293

5,818

6,656

Depreciation

4,513

4,540

4,261

4,605

4,598

9,053

9,366

Communications

2,982

2,899

2,931

3,027

3,324

5,881

6,519

Other real estate expense

198

244

279

258

40

442

86

Net (gain) loss on sale or write-down of other real estate

(1,839

)

(887

)

(195

)

(137

)

4

(2,726

)

(126

)

Merger related expenses

-

-

-

-

7,474

-

8,018

Other noninterest expense

11,405

10,576

12,542

11,896

13,045

21,981

26,239

Total noninterest expense

115,191

119,076

120,205

117,919

134,368

234,267

259,109

Income before income taxes

165,764

169,514

173,976

165,118

140,262

335,278

305,940

Provision for income taxes

35,153

36,205

36,885

35,054

9,361

71,358

44,191

Net income available to common shareholders

$

130,611

$

133,309

$

137,091

$

130,064

$

130,901

$

263,920

$

261,749

(C) Interest income on securities was reduced by net premium amortization of $14,436, $12,844, $11,509, $10,089 and $9,224 for the three months ended June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively, and $27,280 and $17,229 for the six months ended June 30, 2021 and June 30, 2020, respectively.

Page 9 of 17

Prosperity Bancshares, Inc. ®

Financial Highlights (Unaudited)

(Dollars and share amounts in thousands, except per share data and market prices)

Three Months Ended

Year-to-Date

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Jun 30, 2021

Jun 30, 2020

Profitability

Net income (D) (E)

$

130,611

$

133,309

$

137,091

$

130,064

$

130,901

$

263,920

$

261,749

Basic earnings per share

$

1.41

$

1.44

$

1.48

$

1.40

$

1.41

$

2.84

$

2.80

Diluted earnings per share

$

1.41

$

1.44

$

1.48

$

1.40

$

1.41

$

2.84

$

2.80

Return on average assets (F)

1.45

%

1.54

%

1.63

%

1.58

%

1.61

%

(J)

1.49

%

1.64

%

(J)

Return on average common equity (F)

8.31

%

8.60

%

8.98

%

8.64

%

8.84

%

(J)

8.46

%

8.85

%

(J)

Return on average tangible common equity(F)(G)

17.49

%

18.43

%

19.57

%

19.19

%

19.98

%

(J)

17.95

%

20.07

%

(J)

Tax equivalent net interest margin (D) (E)(H)

3.11

%

3.41

%

3.49

%

3.57

%

3.69

%

3.26

%

3.75

%

Efficiency ratio (G) (I)

40.96

%

41.25

%

40.77

%

40.17

%

46.56

%

(K)

41.11

%

44.72

%

(K)

Liquidity and Capital Ratios

Equity to assets

17.48

%

17.50

%

18.00

%

18.18

%

18.04

%

17.48

%

18.04

%

Common equity tier 1 capital

15.26

%

14.60

%

13.74

%

13.17

%

12.29

%

15.26

%

12.29

%

Tier 1 risk-based capital

15.26

%

14.60

%

13.74

%

13.17

%

12.29

%

15.26

%

12.29

%

Total risk-based capital

15.71

%

15.07

%

14.23

%

14.28

%

13.36

%

15.71

%

13.36

%

Tier 1 leverage capital

9.50

%

9.68

%

9.67

%

9.57

%

9.41

%

9.50

%

9.41

%

Period end tangible equity to period end tangible assets (G)

9.18

%

9.05

%

9.19

%

9.12

%

8.89

%

9.18

%

8.89

%

Other Data

Weighted-average shares used in computing earnings per common share

Basic

92,935

92,854

92,559

92,656

92,658

92,895

93,514

Diluted

92,935

92,854

92,559

92,656

92,658

92,895

93,514

Period end shares outstanding

92,935

92,929

92,571

92,562

92,660

92,935

92,660

Cash dividends paid per common share

$

0.49

$

0.49

$

0.49

$

0.46

$

0.46

$

0.98

$

0.92

Book value per common share

$

67.90

$

66.95

$

66.23

$

65.20

$

64.19

$

67.90

$

64.19

Tangible book value per common share (G)

$

32.40

$

31.42

$

30.53

$

29.46

$

28.45

$

32.40

$

28.45

Common Stock Market Price

High

$

78.06

$

83.02

$

70.38

$

60.63

$

72.95

$

83.02

$

75.22

Low

$

69.83

$

66.45

$

50.43

$

48.80

$

43.68

$

66.45

$

42.02

Period end closing price

$

71.80

$

76.16

$

69.36

$

51.83

$

59.38

$

71.80

$

59.38

Employees - FTE (excluding overtime)

3,724

3,724

3,756

3,716

3,793

3,724

3,793

Number of banking centers

274

275

275

275

275

274

275

(D) Includes purchase accounting adjustments for the periods presented as follows:

Three Months Ended

Year-to-Date

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Jun 30, 2021

Jun 30, 2020

Loan discount accretion

ASC 310-20

$9,731

$13,313

$13,514

$16,729

$17,999

$23,044

$40,462

ASC 310-30

$2,462

$3,027

$2,545

$5,805

$6,267

$5,489

$12,286

Securities net amortization

$171

$111

$66

$116

$203

$282

$397

Time deposits amortization

$327

$507

$790

$1,240

$1,793

$834

$4,063

(E) Using effective tax rate of 21.2%, 21.4%, 21.2%, 21.2% and 6.7% for the three months ended June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively, and 21.3% and 14.4% for the six months ended June 30, 2021 and June 30, 2020, respectively. Net income for the second quarter of 2020 includes a tax benefit for NOL due to the CARES Act.

(F) Interim periods annualized.

(G) Refer to the 'Notes to Selected Financial Data' at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(H) Net interest margin for all periods presented is based on average balances on an actual 365-day or 366-day basis.

(I) Calculated by dividing total noninterest expense, excluding credit loss provisions, by net interest income plus noninterest income, excluding net gains and losses on the sale or write down of assets and securities. Additionally, taxes are not part of this calculation.

(J) For calculations of the annualized returns on average assets, average common equity and average tangible common equity excluding merger related expenses, net of tax, and NOL tax benefit, refer to the 'Notes to Selected Financial Data' at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

(K) For calculations of the efficiency ratio excluding merger related expenses, net of tax, refer to the 'Notes to Selected Financial Data' at the end of this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

Page 10 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS

Three Months Ended

Jun 30, 2021

Mar 31, 2021

Jun 30, 2020

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(L)

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(L)

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(L)

Interest-earning assets:

Loans held for sale

$

13,716

$

109

3.19%

$

33,327

$

238

2.90%

$

63,338

$

523

3.32%

Loans held for investment

17,305,259

200,817

4.65%

17,279,066

213,978

5.02%

18,135,226

228,062

5.06%

Loans held for investment - Warehouse Purchase Program

1,984,305

15,877

3.21%

2,369,601

18,859

3.23%

1,843,097

14,187

3.10%

Total Loans

19,303,280

216,803

4.50%

19,681,994

233,075

4.80%

20,041,661

242,772

4.87%

Investment securities

11,180,948

43,708

1.57%

(M)

9,148,841

38,677

1.71%

(M)

8,054,008

43,776

2.19%

(M)

Federal funds sold and other earning assets

1,221,993

340

0.11%

1,506,645

351

0.09%

172,761

45

0.10%

Total interest-earning assets

31,706,221

260,851

3.30%

30,337,480

272,103

3.64%

28,268,430

286,593

4.08%

Allowance for credit losses

(306,059

)

(315,590

)

(325,720

)

Noninterest-earning assets

4,695,860

4,522,470

4,562,016

Total assets

$

36,096,022

$

34,544,360

$

32,504,726

Interest-bearing liabilities:

Interest-bearing demand deposits

$

6,281,068

$

5,471

0.35%

$

6,112,469

$

5,943

0.39%

$

4,949,023

$

4,621

0.38%

Savings and money market deposits

9,872,624

5,490

0.22%

9,420,064

5,753

0.25%

8,537,352

8,745

0.41%

Certificates and other time deposits

2,980,186

4,327

0.58%

3,031,621

5,666

0.76%

3,224,196

11,903

1.48%

Other borrowings

-

-

-

-

-

-

474,867

533

0.45%

Securities sold under repurchase agreements

383,975

164

0.17%

376,662

159

0.17%

365,077

337

0.37%

Subordinated notes

-

-

-

-

-

-

125,475

1,499

4.80%

Total interest-bearing liabilities

19,517,853

15,452

0.32%

(N)

18,940,816

17,521

0.38%

(N)

17,675,990

27,638

0.63%

(N)

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

10,062,085

9,206,791

8,583,734

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

Other liabilities

198,748

169,138

289,899

Total liabilities

29,808,633

28,346,692

26,579,570

Shareholders' equity

6,287,389

6,197,668

5,925,156

Total liabilities and shareholders' equity

$

36,096,022

$

34,544,360

$

32,504,726

Net interest income and margin

$

245,399

3.10%

$

254,582

3.40%

$

258,955

3.68%

Non-GAAP to GAAP reconciliation:

Tax equivalent adjustment

586

635

690

Net interest income and margin (tax equivalent basis)

$

245,985

3.11%

$

255,217

3.41%

$

259,645

3.69%

(L) Annualized and based on an actual 365-day or 366-day basis.

(M) Yield on securities was impacted by net premium amortization of $14,436, $12,844 and $9,224 for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

(N) Total cost of funds, including noninterest bearing deposits, was 0.21%, 0.25% and 0.42% for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

Page 11 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

YIELD ANALYSIS

Year-to-Date

Jun 30, 2021

Jun 30, 2020

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(O)

Average

Balance

Interest

Earned/

Interest

Paid

Average

Yield/

Rate

(O)

Interest-earning assets:

Loans held for sale

$

23,468

$

347

2.98%

$

65,128

$

1,155

3.57%

Loans held for investment

17,292,235

414,795

4.84%

17,699,162

464,579

5.28%

Loans held for investment - Warehouse Purchase Program

2,175,888

34,736

3.22%

1,481,710

24,281

3.30%

Total loans

19,491,591

449,878

4.65%

19,246,000

490,015

5.12%

Investment securities

10,170,508

82,385

1.63%

(P)

8,244,102

92,058

2.25%

(P)

Federal funds sold and other earning assets

1,363,533

691

0.10%

198,196

758

0.77%

Total interest-earning assets

31,025,632

532,954

3.46%

27,688,298

582,831

4.23%

Allowance for credit losses(B)

(310,798

)

(326,862

)

Noninterest-earning assets

4,609,640

4,569,631

Total assets

$

35,324,474

$

31,931,067

Interest-bearing liabilities:

Interest-bearing demand deposits

$

6,197,235

$

11,414

0.37%

$

4,969,700

$

11,717

0.47%

Savings and money market deposits

9,647,594

11,243

0.24%

8,251,396

22,867

0.56%

Certificates and other time deposits

3,005,761

9,993

0.67%

3,314,472

25,703

1.56%

Other borrowings

-

-

-

653,914

3,465

1.07%

Securities sold under repurchase agreements

380,339

323

0.17%

365,846

1,094

0.60%

Subordinated notes

-

-

-

125,585

2,999

4.80%

Total interest-bearing liabilities

19,230,929

32,973

0.35%

(Q)

17,680,913

67,845

0.77%

(Q)

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

9,636,800

8,037,767

Allowance for credit losses on off-balance sheet credit exposures

29,947

21,478

Other liabilities

184,023

276,211

Total liabilities

29,081,699

26,016,369

Shareholders' equity

6,242,775

5,914,698

Total liabilities and shareholders' equity

35,324,474

$

31,931,067

Net interest income and margin

$

499,981

3.25%

$

514,986

3.74%

Non-GAAP to GAAP reconciliation:

Tax equivalent adjustment

1,222

1,413

Net interest income and margin (tax equivalent basis)

$

501,203

3.26%

$

516,399

3.75%

(O) Annualized and based on an actual 365-day or 366-day basis.

(P) Yield on securities was impacted by net premium amortization of $27,280 and $17,229 for the six months ended June 30, 2021 and 2020, respectively.

(Q) Total cost of funds, including noninterest bearing deposits, was 0.23% and 0.53% for the six months ended June 30, 2021 and 2020, respectively.

Page 12 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

YIELD TREND (R)

Interest-Earning Assets:

Loans held for sale

3.19

%

2.90

%

3.23

%

3.30

%

3.32

%

Loans held for investment

4.65

%

5.02

%

4.95

%

4.91

%

5.06

%

Loans held for investment - Warehouse Purchase Program

3.21

%

3.23

%

3.20

%

3.18

%

3.10

%

Total loans

4.50

%

4.80

%

4.72

%

4.72

%

4.87

%

Investment securities (S)

1.57

%

1.71

%

1.83

%

1.99

%

2.19

%

Federal funds sold and other earning assets

0.11

%

0.09

%

0.11

%

0.09

%

0.10

%

Total interest-earning assets

3.30

%

3.64

%

3.76

%

3.90

%

4.08

%

Interest-Bearing Liabilities:

Interest-bearing demand deposits

0.35

%

0.39

%

0.38

%

0.38

%

0.38

%

Savings and money market deposits

0.22

%

0.25

%

0.30

%

0.35

%

0.41

%

Certificates and other time deposits

0.58

%

0.76

%

0.98

%

1.23

%

1.48

%

Other borrowings

-

-

5.39

%

1.49

%

0.45

%

Securities sold under repurchase agreements

0.17

%

0.17

%

0.24

%

0.32

%

0.37

%

Subordinated notes

-

-

4.87

%

4.76

%

4.80

%

Total interest-bearing liabilities

0.32

%

0.38

%

0.46

%

0.54

%

0.63

%

Net Interest Margin

3.10

%

3.40

%

3.48

%

3.56

%

3.68

%

Net Interest Margin (tax equivalent)

3.11

%

3.41

%

3.49

%

3.57

%

3.69

%

(R) Annualized and based on average balances on an actual 365-day or 366-day basis.

(S) Yield on securities was impacted by net premium amortization of $14,436, $12,844, $11,509, $10,089 and $9,224 for the three months ended June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020 and June 30, 2020, respectively.

Page 13 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Balance Sheet Averages

Loans held for sale

$

13,716

$

33,327

$

42,856

$

50,606

$

63,338

Loans held for investment

17,305,259

17,279,066

17,700,756

18,267,559

18,135,226

Loans held for investment - Warehouse Purchase Program

1,984,305

2,369,601

2,603,455

2,279,461

1,843,097

Total Loans

19,303,280

19,681,994

20,347,067

20,597,626

20,041,661

Investment securities

11,180,948

9,148,841

8,001,679

7,603,762

8,054,008

Federal funds sold and other earning assets

1,221,993

1,506,645

1,094,487

618,228

172,761

Total interest-earning assets

31,706,221

30,337,480

29,443,233

28,819,616

28,268,430

Allowance for credit losses

(306,059

)

(315,590

)

(322,138

)

(321,424

)

(325,720

)

Cash and due from banks

521,737

308,787

289,579

267,887

247,426

Goodwill

3,231,637

3,233,231

3,231,850

3,231,976

3,223,469

Core deposit intangibles, net

68,830

71,763

74,919

78,269

81,539

Other real estate

3,001

6,385

14,573

8,061

5,666

Fixed assets, net

326,570

326,004

325,485

325,958

327,811

Other assets

544,085

576,300

633,405

570,495

676,105

Total assets

$

36,096,022

$

34,544,360

$

33,690,906

$

32,980,838

$

32,504,726

Noninterest-bearing deposits

$

10,062,085

$

9,206,791

$

9,103,742

$

8,980,814

$

8,583,734

Interest-bearing demand deposits

6,281,068

6,112,469

5,545,298

5,221,722

4,949,023

Savings and money market deposits

9,872,624

9,420,064

9,170,179

8,937,751

8,537,352

Certificates and other time deposits

2,980,186

3,031,621

3,047,475

3,103,290

3,224,196

Total deposits

29,195,963

27,770,945

26,866,694

26,243,577

25,294,305

Other borrowings

-

-

2,435

13,898

474,867

Securities sold under repurchase agreements

383,975

376,662

376,779

378,888

365,077

Subordinated notes

-

-

81,570

125,256

125,475

Allowance for credit losses on off-balance sheet credit exposures

29,947

29,947

29,947

29,947

29,947

Other liabilities

198,748

169,138

224,907

167,532

289,899

Shareholders' equity

6,287,389

6,197,668

6,108,574

6,021,740

5,925,156

Total liabilities and equity

$

36,096,022

$

34,544,360

$

33,690,906

$

32,980,838

$

32,504,726

Page 14 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Period End Balances

Loan Portfolio

Commercial and industrial

$

2,021,951

10.5

%

$

2,104,116

10.7

%

$

2,210,003

10.9

%

$

2,171,302

10.5

%

$

2,214,742

10.5

%

Warehouse purchase program

2,095,559

10.9

%

2,272,389

11.6

%

2,842,379

14.0

%

2,730,614

13.1

%

2,557,183

12.2

%

Construction, land development and other land loans

2,147,474

11.2

%

2,031,355

10.4

%

1,956,960

9.7

%

2,081,762

10.0

%

2,033,037

9.7

%

1-4 family residential

4,531,589

23.5

%

4,310,437

21.9

%

4,253,331

21.0

%

4,189,852

20.1

%

4,184,972

19.9

%

Home equity

637,431

3.3

%

554,278

2.8

%

504,207

2.5

%

477,552

2.3

%

437,098

2.1

%

Commercial real estate (includes multi-family residential)

5,681,184

29.5

%

5,858,475

29.8

%

6,078,764

30.0

%

6,179,901

29.7

%

6,550,086

31.2

%

Agriculture (includes farmland)

590,135

3.1

%

571,783

2.9

%

581,352

2.9

%

598,972

2.9

%

612,694

2.9

%

Consumer and other

264,652

1.4

%

293,023

1.5

%

344,028

1.7

%

367,231

1.8

%

403,462

1.9

%

Energy

501,821

2.6

%

503,947

2.6

%

512,735

2.5

%

604,698

2.9

%

639,402

3.0

%

Paycheck Protection Program

779,989

4.0

%

1,139,083

5.8

%

963,185

4.8

%

1,393,757

6.7

%

1,392,497

6.6

%

Total loans

$

19,251,785

$

19,638,886

$

20,246,944

$

20,795,641

$

21,025,173

Deposit Types

Noninterest-bearing DDA

$

10,099,149

34.7

%

$

9,820,445

34.1

%

$

9,151,233

33.4

%

$

8,998,328

34.0

%

$

9,040,257

34.6

%

Interest-bearing DDA

6,185,115

21.2

%

6,158,641

21.4

%

5,899,051

21.6

%

5,297,802

20.0

%

5,130,495

19.6

%

Money market

6,706,252

23.0

%

6,714,889

23.4

%

6,381,014

23.3

%

6,324,127

23.9

%

6,148,206

23.5

%

Savings

3,160,606

10.9

%

3,083,447

10.7

%

2,863,086

10.5

%

2,772,492

10.5

%

2,722,718

10.4

%

Certificates and other time deposits

2,959,119

10.2

%

2,985,683

10.4

%

3,066,108

11.2

%

3,066,457

11.6

%

3,111,012

11.9

%

Total deposits

$

29,110,241

$

28,763,105

$

27,360,492

$

26,459,206

$

26,152,688

Loan to Deposit Ratio

66.1

%

68.3

%

74.0

%

78.6

%

80.4

%

Page 15 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Construction Loans

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Single family residential construction

$

624,954

29.1

%

$

590,223

29.1

%

$

579,761

29.6

%

$

654,933

31.5

%

$

710,401

34.9

%

Land development

97,709

4.6

%

97,267

4.8

%

103,307

5.3

%

114,937

5.5

%

114,748

5.6

%

Raw land

245,484

11.4

%

243,394

12.0

%

247,628

12.7

%

240,154

11.5

%

274,159

13.5

%

Residential lots

165,645

7.7

%

176,884

8.6

%

158,441

8.1

%

137,615

6.6

%

144,765

7.1

%

Commercial lots

153,714

7.2

%

137,512

6.8

%

114,427

5.8

%

109,569

5.3

%

103,267

5.1

%

Commercial construction and other

860,069

40.0

%

786,192

38.7

%

753,587

38.5

%

825,053

39.6

%

687,618

33.8

%

Net unaccreted discount

(101

)

(117

)

(191

)

(499

)

(1,921

)

Total construction loans

$

2,147,474

$

2,031,355

$

1,956,960

$

2,081,762

$

2,033,037

Non-Owner Occupied Commercial Real Estate Loans by Metropolitan Statistical Area (MSA) as of June 30, 2021

Houston

Dallas

Austin

OK City

Tulsa

Other (T)

Total

Collateral Type

Shopping center/retail

$

380,117

$

270,891

$

52,981

$

19,350

$

29,253

$

297,645

$

1,050,237

Commercial and industrial buildings

157,719

89,284

20,485

20,970

17,691

172,869

479,018

Office buildings

158,722

494,963

30,440

73,335

4,912

72,207

834,579

Medical buildings

105,852

25,139

2,639

23,839

39,217

78,944

275,630

Apartment buildings

246,330

257,044

24,080

14,993

35,917

162,749

741,113

Hotel

79,503

70,388

43,372

28,996

-

131,253

353,512

Other

76,469

62,065

24,118

8,211

3,560

65,570

239,993

Total

$

1,204,712

$

1,269,774

$

198,115

$

189,694

$

130,550

$

981,237

$

3,974,082

(U)

Acquired Loans

Non-PCD Loans

PCD Loans

Total Acquired Loans

Balance at

Acquisition

Date

Balance at

Mar 31, 2021

Balance at

Jun 30, 2021

Balance at

Acquisition

Date

Balance at

Mar 31, 2021

Balance at

Jun 30, 2021

Balance at

Acquisition

Date

Balance at

Mar 31, 2021

Balance at

Jun 30, 2021

Loan marks:

Acquired banks (V)

$

345,599

$

26,285

$

16,535

$

320,052

$

11,157

$

8,695

$

665,651

$

37,442

$

25,230

Acquired portfolio loan balances:

Acquired banks (V)

12,286,159

3,339,670

2,913,494

689,573

163,191

144,694

12,975,732

(W)

3,502,861

3,058,188

Acquired portfolio loan balances less loan marks

$

11,940,560

$

3,313,385

$

2,896,959

$

369,521

$

152,034

$

135,999

$

12,310,081

$

3,465,419

$

3,032,958

(T) Includes other MSA and non-MSA regions.

(U) Represents a portion of total commercial real estate loans of $5.681 billion as of June 30, 2021.

(V) Includes Bank Arlington, American State Bank, Community National Bank, First Federal Bank Texas, Coppermark Bank, First Victoria National Bank, The F&M Bank & Trust Company, Tradition Bank and LegacyTexas Bank.

(W) Actual principal balances acquired.

Page 16 of 17

Prosperity Bancshares, Inc.®

Financial Highlights (Unaudited)

(Dollars in thousands)

Three Months Ended

Year-to-Date

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Jun 30, 2021

Jun 30, 2020

Asset Quality

Nonaccrual loans

$

32,880

$

43,025

$

47,185

$

57,412

$

62,904

$

32,880

$

62,904

Accruing loans 90 or more days past due

330

313

1,699

462

8,691

330

8,691

Total nonperforming loans

33,210

43,338

48,884

57,874

71,595

33,210

71,595

Repossessed assets

310

362

93

120

187

310

187

Other real estate

144

462

10,593

11,548

6,160

144

6,160

Total nonperforming assets

$

33,664

$

44,162

$

59,570

$

69,542

$

77,942

$

33,664

$

77,942

Nonperforming assets:

Commercial and industrial (includes energy)

$

8,613

$

11,290

$

16,176

$

17,273

$

15,238

$

8,613

$

15,238

Construction, land development and other land loans

1,423

1,692

1,566

2,633

10,530

1,423

10,530

1-4 family residential (includes home equity)

11,681

11,920

25,830

29,953

29,812

11,681

29,812

Commercial real estate (includes multi-family residential)

11,266

16,896

12,315

16,069

20,748

11,266

20,748

Agriculture (includes farmland)

661

803

2,075

1,931

1,501

661

1,501

Consumer and other

20

1,561

1,608

1,683

113

20

113

Total

$

33,664

$

44,162

$

59,570

$

69,542

$

77,942

$

33,664

$

77,942

Number of loans/properties

152

167

208

198

213

152

213

Allowance for credit losses at end of period

$

302,884

$

307,210

$

316,068

$

323,635

$

324,205

$

302,884

$

324,205

Net charge-offs (recoveries):

Commercial and industrial (includes energy)

$

3,529

$

1,584

$

4,085

$

8,344

$

12,206

$

5,113

$

12,178

Construction, land development and other land loans

(105

)

(5

)

(110

)

478

(6

)

(110

)

(18

)

1-4 family residential (includes home equity)

(6

)

47

1,982

252

51

41

56

Commercial real estate (includes multi-family residential)

517

6,589

626

676

-

7,106

(81

)

Agriculture (includes farmland)

(9

)

33

(4

)

(17

)

(3

)

24

(4

)

Consumer and other

400

610

988

837

753

1,010

1,671

Total

$

4,326

$

8,858

$

7,567

$

10,570

$

13,001

$

13,184

$

13,802

Asset Quality Ratios

Nonperforming assets to average interest-earning assets

0.11

%

0.15

%

0.20

%

0.24

%

0.28

%

0.11

%

0.28

%

Nonperforming assets to loans and other real estate

0.17

%

0.22

%

0.29

%

0.33

%

0.37

%

0.17

%

0.37

%

Net charge-offs to average loans (annualized)

0.09

%

0.18

%

0.15

%

0.21

%

0.26

%

0.14

%

0.14

%

Allowance for credit losses to total loans

1.57

%

1.56

%

1.56

%

1.56

%

1.54

%

1.57

%

1.54

%

Allowance for credit losses to total loans, excluding Warehouse Purchase Program loans and Paycheck Protection Program loans (G)

1.85

%

1.89

%

1.92

%

1.94

%

1.90

%

1.85

%

1.90

%

Page 17 of 17

Prosperity Bancshares, Inc.®

Notes to Selected Financial Data (Unaudited)

(Dollars and share amounts in thousands, except per share data)

NOTES TO SELECTED FINANCIAL DATA

Prosperity's management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Specifically, Prosperity reviews diluted earnings per share excluding merger related expenses, net of tax, and NOL tax benefit; return on average assets excluding merger related expenses, net of tax, and NOL tax benefit; return on average common equity excluding merger related expenses, net of tax, and NOL tax benefit; return on average tangible common equity; return on average tangible common equity excluding merger related expenses, net of tax, and NOL tax benefit; tangible book value per share; the tangible equity to tangible assets ratio; allowance for credit losses to total loans excluding Warehouse Purchase Program and PPP loans; the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities; and the efficiency ratio, excluding net gains and losses on the sale or write down of assets and securities and merger related expenses, for internal planning and forecasting purposes. In addition, due to the application of purchase accounting, Prosperity uses certain non-GAAP financial measures and ratios that exclude the impact of these items to evaluate its allowance for credit losses to total loans (excluding Warehouse Purchase Program loans and PPP loans). Prosperity has included information below relating to these non-GAAP financial measures for the applicable periods presented.

Three Months Ended

Year-to-Date

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Jun 30, 2021

Jun 30, 2020

Reconciliation of diluted earnings per share to diluted earnings per share, excluding merger related expenses, net of tax, and NOL tax benefit:

Net income

$

130,611

$

133,309

$

137,091

$

130,064

$

130,901

$

263,920

$

261,749

Add: merger related expenses, net of tax(X)

-

-

-

-

5,904

-

6,334

Less: NOL tax benefit (Y)

-

-

-

-

(20,145

)

-

(20,145

)

Net income, excluding merger related expenses, net of tax, and NOL tax benefit (X) (Y)

$

130,611

$

133,309

$

137,091

$

130,064

$

116,660

$

263,920

$

247,938

Weighted average diluted shares outstanding

92,935

92,854

92,559

92,656

92,658

92,895

93,514

Merger related expenses per diluted share, net of tax(X)

$

-

$

-

$

-

$

-

$

0.06

$

-

$

0.07

NOL tax benefit per diluted share (X)

$

-

$

-

$

-

$

-

$

(0.22

)

$

-

$

(0.22

)

Diluted earnings per share, excluding merger related expenses, net of tax, and NOL tax benefit (X) (Y)

$

1.41

$

1.44

$

1.48

$

1.40

$

1.25

$

2.84

$

2.65

Reconciliation of return on average assets to return on average assets excluding merger related expenses, net of tax, and NOL tax benefit:

Net income, excluding merger related expenses, net of tax, and NOL tax benefit (X) (Y)

$

130,611

$

133,309

$

137,091

$

130,064

$

116,660

$

263,920

$

247,938

Average total assets

$

36,096,022

$

34,544,360

$

33,690,906

$

32,980,838

$

32,504,726

$

35,324,474

$

31,931,067

Return on average assets excluding merger related expenses, net of tax, and NOL tax benefit (F) (X) (Y)

1.45

%

1.54

%

1.63

%

1.58

%

1.44

%

1.49

%

1.55

%

Reconciliation of return on average common equity to return on average common equity excluding merger related expenses, net of tax, and NOL tax benefit:

Net income, excluding merger related expenses, net of tax, and NOL tax benefit (X) (Y)

$

130,611

$

133,309

$

137,091

$

130,064

$

116,660

$

263,920

$

247,938

Average shareholders' equity

$

6,287,389

$

6,197,668

$

6,108,574

$

6,021,740

$

5,925,156

$

6,242,775

$

5,914,698

Return on average common equity excluding merger related expenses, net of tax, and NOL tax benefit (F) (X) (Y)

8.31

%

8.60

%

8.98

%

8.64

%

7.88

%

8.46

%

8.38

%

Reconciliation of return on average common equity to return on average tangible common equity:

Net income

$

130,611

$

133,309

$

137,091

$

130,064

$

130,901

$

263,920

$

261,749

Average shareholders' equity

$

6,287,389

$

6,197,668

$

6,108,574

$

6,021,740

$

5,925,156

$

6,242,775

$

5,914,698

Less: Average goodwill and other intangible assets

(3,300,467

)

(3,304,994

)

(3,306,769

)

(3,310,245

)

(3,305,008

)

(3,302,718

)

(3,306,753

)

Average tangible shareholders' equity

$

2,986,922

$

2,892,674

$

2,801,805

$

2,711,495

$

2,620,148

$

2,940,057

$

2,607,945

Return on average tangible common equity(F)

17.49

%

18.43

%

19.57

%

19.19

%

19.98

%

17.95

%

20.07

%

(X) Calculated assuming a federal tax rate of 21.0%.

(Y) Net income for the second quarter of 2020 includes a tax benefit for NOL due to the CARES Act.

Page 18 of 17

Three Months Ended

Year-to-Date

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Jun 30, 2021

Jun 30, 2020

Reconciliation of return on average common equity to return on average tangible common equity excluding merger related expenses, net of tax, and NOL tax benefit:

Net income, excluding merger related expenses, net of tax, and NOL tax benefit (X) (Y)

$

130,611

$

133,309

$

137,091

$

130,064

$

116,660

$

263,920

$

247,938

Average shareholders' equity

$

6,287,389

$

6,197,668

$

6,108,574

$

6,021,740

$

5,925,156

$

6,242,775

$

5,914,698

Less: Average goodwill and other intangible assets

(3,300,467

)

(3,304,994

)

(3,306,769

)

(3,310,245

)

(3,305,008

)

(3,302,718

)

(3,306,753

)

Average tangible shareholders' equity

$

2,986,922

$

2,892,674

$

2,801,805

$

2,711,495

$

2,620,148

$

2,940,057

$

2,607,945

Return on average tangible common equity excluding merger related expenses, net of tax, and NOL tax benefit (F) (X) (Y)

17.49

%

18.43

%

19.57

%

19.19

%

17.81

%

17.95

%

19.01

%

Reconciliation of book value per share to tangible book value per share:

Shareholders' equity

$

6,310,337

$

6,221,846

$

6,130,669

$

6,034,877

$

5,948,122

$

6,310,337

$

5,948,122

Less: Goodwill and other intangible assets

(3,299,053

)

(3,301,940

)

(3,304,871

)

(3,308,170

)

(3,311,712

)

(3,299,053

)

(3,311,712

)

Tangible shareholders' equity

$

3,011,284

$

2,919,906

$

2,825,798

$

2,726,707

$

2,636,410

$

3,011,284

$

2,636,410

Period end shares outstanding

92,935

92,929

92,571

92,562

92,660

92,935

92,660

Tangible book value per share

$

32.40

$

31.42

$

30.53

$

29.46

$

28.45

$

32.40

28.45

Reconciliation of equity to assets ratio to period end tangible equity to period end tangible assets ratio:

Tangible shareholders' equity

$

3,011,284

$

2,919,906

$

2,825,798

$

2,726,707

$

2,636,410

$

3,011,284

$

2,636,410

Total assets

$

36,099,924

$

35,558,418

$

34,059,275

$

33,197,599

$

32,966,649

$

36,099,924

$

32,966,649

Less: Goodwill and other intangible assets

(3,299,053

)

(3,301,940

)

(3,304,871

)

(3,308,170

)

(3,311,712

)

(3,299,053

)

(3,311,712

)

Tangible assets

$

32,800,871

$

32,256,478

$

30,754,404

$

29,889,429

$

29,654,937

$

32,800,871

$

29,654,937

Period end tangible equity to period end tangible assets ratio

9.18

%

9.05

%

9.19

%

9.12

%

8.89

%

9.18

%

8.89

%

Reconciliation of allowance for credit losses to total loans to allowance for credit losses to total loans, excluding Warehouse Purchase Program and Paycheck Protection Program loans:

Allowance for credit losses

$

302,884

$

307,210

$

316,068

$

323,635

$

324,205

$

302,884

$

324,205

Total loans

$

19,251,785

$

19,638,886

$

20,246,944

$

20,795,641

$

21,025,173

$

19,251,785

$

21,025,173

Less: Warehouse Purchase Program loans

(2,095,559

)

(2,272,389

)

(2,842,379

)

(2,730,614

)

(2,557,183

)

(2,095,559

)

2,557,183

Less: Paycheck Protection Program loans

(779,989

)

(1,139,083

)

(963,185

)

(1,393,757

)

(1,392,497

)

(779,989

)

1,392,497

Total loans less Warehouse Purchase Program and Paycheck Protection Program loans

$

16,376,237

$

16,227,414

$

16,441,380

$

16,671,270

$

17,075,493

$

16,376,237

$

17,075,493

Allowance for credit losses to total loans, excluding Warehouse Purchase Program and Paycheck Protection Program loans

1.85

%

1.89

%

1.92

%

1.94

%

1.90

%

1.85

%

1.90

%

Reconciliation of efficiency ratio to efficiency ratio, excluding net gains and losses on the sale of assets and taxes:

Noninterest expense

$

115,191

$

119,076

$

120,205

$

117,919

$

134,368

$

234,267

$

259,109

Net interest income

$

245,399

$

254,582

$

257,634

$

258,113

$

258,955

$

499,981

$

514,986

Noninterest income

35,556

34,008

36,547

34,924

25,675

69,564

60,063

Less: net loss on sale or write down of assets

(244

)

(79

)

(675

)

(528

)

(3,945

)

(323

)

(4,330

)

Noninterest income excluding net gains and losses on the sale or write down of assets and securities

35,800

34,087

37,222

35,452

29,620

69,887

64,393

Total income excluding net gains and losses on the sale or write down of assets and taxes

$

281,199

$

288,669

$

294,856

$

293,565

$

288,575

$

569,868

$

579,379

Efficiency ratio, excluding net gains and losses on the sale or write down of assets and taxes

40.96

%

41.25

%

40.77

%

40.17

%

46.56

%

41.11

%

44.72

%

Page 19 of 17

Three Months Ended

Year-to-Date

Jun 30, 2021

Mar 31, 2021

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Jun 30, 2021

Jun 30, 2020

Reconciliation of efficiency ratio to efficiency ratio, excluding net gains and losses on the sale of assets, taxes and merger related expenses:

Noninterest expense

$

115,191

$

119,076

$

120,205

$

117,919

$

134,368

$

234,267

$

259,109

Less: merger related expenses

-

-

-

-

7,474

-

8,018

Noninterest expense excluding merger related expenses

$

115,191

$

119,076

$

120,205

$

117,919

$

126,894

$

234,267

$

251,091

Net interest income

$

245,399

$

254,582

$

257,634

$

258,113

$

258,955

$

499,981

$

514,986

Noninterest income

35,556

34,008

36,547

34,924

25,675

69,564

60,063

Less: net loss on sale or write down of assets

(244

)

(79

)

(675

)

(528

)

(3,945

)

(323

)

(4,330

)

Noninterest income excluding net gains and losses on the sale or write down of assets and taxes

35,800

34,087

37,222

35,452

29,620

69,887

64,393

Total income excluding net gains and losses on the sale or write down of assets and taxes

$

281,199

$

288,669

$

294,856

$

293,565

$

288,575

$

569,868

$

579,379

Efficiency ratio, excluding net gains and losses on the sale or write down of assets, taxes and merger related expenses

40.96

%

41.25

%

40.77

%

40.17

%

43.97

%

41.11

%

43.34

%

Page 20 of 17

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Disclaimer

Prosperity Bancshares Inc. published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 10:33:10 UTC.